PPF Account Guide: Interest Rates, Deposit Limits & Everything You Need to Know in 2025
Your no-fluff, complete guide to the Public Provident Fund — India’s most trusted long-term savings scheme. Know exactly what you earn, what you can invest, and how to make it work harder for you.
7.1%
Current Interest Rate (FY 2025-26)
₹1.5L
Max Deposit Per Year
15 Yrs
Lock-in Period
EEE
Tax Status (Triple Exempt)
📋 In This Guide
What is a PPF Account? A Quick Recap for First-Timers
If you’ve ever asked your parents about safe investments in India, chances are they’ve mentioned the Public Provident Fund — or PPF as it’s commonly known. Introduced back in 1968 by the National Savings Institute under India’s Ministry of Finance, PPF has quietly been building wealth for crores of Indian families for over five decades.
In simple terms, PPF is a government-backed savings scheme where you deposit money every year, earn a fixed interest rate set by the government, and get the entire amount — including the interest — completely tax-free after 15 years.
What makes it stand out from typical savings accounts or fixed deposits is this triple tax advantage, popularly known as the EEE status — your contribution is tax-deductible, the interest you earn is tax-free, and the maturity amount is also fully exempt from tax. Not many investment products in India offer all three of these benefits together.
Current PPF Interest Rate for FY 2025-26
The PPF interest rate for FY 2025-26 (Q4: January–March 2026) stands at 7.1% per annum, compounded annually. This rate has remained unchanged since April 2020 — which is both a sign of stability and, honestly, a bit of a concern for investors looking for growth.
The Ministry of Finance reviews the PPF rate every quarter. Even though they review it, the rate hasn’t moved in nearly five years. Whether that changes in the coming quarters depends largely on macroeconomic conditions and RBI’s monetary policy stance.
PPF Interest Rate History (Last 10 Years)
| Financial Year / Period | Interest Rate (% p.a.) |
|---|---|
| FY 2025-26 (All Quarters) | 7.10% |
| FY 2024-25 (All Quarters) | 7.10% |
| FY 2023-24 (All Quarters) | 7.10% |
| FY 2020-21 to 2022-23 | 7.10% |
| FY 2019-20 (Q1) | 8.00% |
| FY 2018-19 | 8.00% |
| FY 2017-18 | 7.60%–7.90% |
| FY 2016-17 | 8.00%–8.10% |
| FY 2015-16 | 8.70% |
As you can see from the table, the rates were as high as 8.7% just a decade ago. The gradual decline mirrors the broad interest rate environment in India, where falling inflation and RBI rate cuts brought down returns across all fixed-income instruments.
PPF Deposit Limits: How Much Can You Actually Invest?
The government has set both a floor and a ceiling on how much you can put into your PPF account every financial year.
Minimum Deposit
₹500 per financial year. Miss a year entirely and your account becomes inactive — you’ll need to pay a ₹50 penalty per inactive year to revive it.
Maximum Deposit
₹1,50,000 (₹1.5 lakh) per financial year. Any amount above this earns zero interest and gets no tax benefit.
Number of Instalments
You can deposit in lump sum or spread it across up to 12 instalments in a financial year. Completely flexible.
Opening Balance
A PPF account can be opened with just ₹100, making it accessible to virtually every Indian household.
Can You Have More Than One PPF Account?
No — each individual is allowed only one PPF account in their own name. Joint accounts are not permitted. However, a parent or guardian can open a separate PPF account on behalf of a minor child, in addition to their own personal account. Just remember, the combined deposits across both accounts cannot exceed ₹1.5 lakh in a financial year to remain within the Section 80C deduction limit.
The Real Tax Benefits of PPF: Breaking Down EEE
The tax story of PPF is genuinely one of the best in the entire Indian financial landscape. Here’s exactly what you get:
Exempt at Investment Stage
Deposits up to ₹1.5 lakh per year qualify for deduction under Section 80C of the Income Tax Act. If you’re in the 30% tax bracket, that’s a saving of up to ₹46,800 per year (including cess).
Exempt on Interest Earned
Unlike FDs where you pay tax on interest income every year, PPF interest is completely tax-free under Section 10 of the Income Tax Act. Every year. Every rupee of interest.
Exempt at Maturity
When your PPF matures after 15 years, the entire corpus — principal plus all accumulated interest — lands in your account absolutely tax-free.
How to Open a PPF Account: Online & Offline
Opening a PPF account today is remarkably simple. You can do it at your bank or post office — either by walking in or through your internet banking portal.
Documents You’ll Need
Keep these ready before you start the process: a valid photo ID (Aadhaar card, PAN card, Voter ID, or Driving Licence), a passport-sized photograph, and proof of address. A PAN card is strongly recommended as it simplifies future tax filings.
Where Can You Open a PPF Account?
You can open a PPF account at any post office or authorised bank. Public sector banks like SBI, PNB, and Bank of Baroda are popular choices. Private banks like HDFC Bank, ICICI Bank, and Axis Bank are also authorised to offer PPF accounts. The interest rate is the same everywhere — it’s set by the government and is not bank-specific.
Opening Online (via Net Banking)
Log in to your bank’s internet banking or mobile banking app. Look for “Open PPF Account” under the savings or investment section. Select whether the account is for yourself or a minor, fill in the required details, and make your first deposit. Your account number and passbook will be generated online.
PPF Withdrawal Rules: When Can You Access Your Money?
The 15-year lock-in is real, but the rules aren’t as rigid as most people assume. Here’s how withdrawals and loans work:
Partial Withdrawal
You can make partial withdrawals from your PPF account starting from the 7th financial year of account opening. The amount you can withdraw is limited to 50% of the balance at the end of the 4th year or 50% of the balance at the end of the preceding year — whichever is lower. Importantly, only one partial withdrawal is allowed per financial year.
Loan Against PPF
Need funds urgently without breaking your PPF? You can take a loan against your PPF balance between the 3rd and 6th financial year. The loan amount is capped at 25% of the balance at the end of the 2nd financial year preceding the loan application. The loan carries a low interest rate — typically 1% above the PPF interest rate — and must be repaid within 36 months.
Full Withdrawal at Maturity
After 15 years, you can close the account and take the entire amount tax-free. Alternatively, you can extend the PPF in blocks of 5 years — either with fresh contributions or without. Extending without contributions is a smart strategy as your existing corpus continues to earn 7.1% interest with zero additional investment required.
Premature Closure
Premature closure is only allowed after 5 years and only under specific circumstances — such as life-threatening illness of the account holder or their family, or for higher education needs. Even then, the interest rate is reduced by 1% as a penalty.
| Year of Account | What You Can Do |
|---|---|
| Year 1–2 | Deposit only. No withdrawals or loans. |
| Year 3–6 | Loan available (up to 25% of 2-year-old balance) |
| Year 5 onwards | Premature closure allowed (specific conditions only) |
| Year 7 onwards | Partial withdrawals allowed (once per year) |
| After 15 Years | Full withdrawal or extension in 5-year blocks |
How Much Will Your PPF Actually Grow? Real Numbers
People often underestimate just how powerful the compounding effect is over 15 years in a PPF. Let’s look at some real scenarios at the current 7.1% rate.
| Annual Deposit | Total Invested (15 Yrs) | Approx. Maturity Amount | Total Interest Earned |
|---|---|---|---|
| ₹500/year | ₹7,500 | ~₹13,600 | ~₹6,100 |
| ₹50,000/year | ₹7,50,000 | ~₹13.56 lakh | ~₹6.06 lakh |
| ₹1,00,000/year | ₹15,00,000 | ~₹27.12 lakh | ~₹12.12 lakh |
| ₹1,50,000/year | ₹22,50,000 | ~₹40.68 lakh | ~₹18.18 lakh |
If you extend the tenure to 30 years (two 5-year extensions after the initial 15), that ₹1.5 lakh annual investment can potentially grow to over ₹1 crore. That’s the power of long-term compounding — and PPF is one of the safest vehicles to harness it.
Union Budget 2025: What Changed for PPF?
The Union Budget 2025 brought in some tweaks to the PPF scheme that make it a little more investor-friendly. Here’s a quick rundown of what changed:
Earlier partial withdrawal window: Previously, partial withdrawals were allowed only from the 7th financial year. Budget 2025 updated this to allow withdrawals from the 5th financial year onwards in specific cases, improving liquidity for investors who need access to funds sooner. (Confirm exact applicable year with your bank as rules may be phased in.)
Interest rate unchanged: Despite expectations, the government kept the PPF interest rate unchanged at 7.1% for FY 2025-26. Investors hoping for a rate revision were disappointed, but the EEE tax benefit continues to make PPF competitive in real after-tax return terms.
The overall message from Budget 2025 seems to be: PPF remains a core savings tool, with slight flexibility improvements, but it’s not being positioned as a high-return instrument. It’s your safe, boring, tax-free wealth builder — and that’s a perfectly valid role in any financial plan.
🚨 When NOT to Rely on Google Search — Talk to an Expert Instead
While the internet — including this very article — can give you solid foundational knowledge about PPF, there are moments when a Google search genuinely isn’t enough. Here’s when you should pick up the phone and call a qualified financial advisor or chartered accountant (CA):
Your tax situation is complex. If you have multiple income sources, foreign income, capital gains, or are a salaried professional with significant investments, a CA can help you figure out whether PPF is genuinely the most efficient use of your Section 80C limit — or whether ELSS or NPS serves you better.
You want to open a PPF account for your minor child and yourself. The rules around combined deposit limits across your account and the minor’s account are nuanced. Getting it wrong can cost you interest and tax benefits. An expert can help you structure this correctly.
You’re considering premature closure. Premature withdrawal rules are strict and the conditions for eligibility are narrow. Before you act, consult the bank and a financial advisor to avoid unnecessary penalties.
You’re close to retirement and unsure about extensions. The decision to extend PPF with or without contributions, or to redirect that money into senior citizen savings schemes or annuities, depends on your overall financial picture. This is a decision worth paying an advisor for.
PPF is not enough on its own. If your retirement goal requires a corpus larger than what PPF alone can build at 7.1%, a financial planner can help you design a diversified strategy that includes equity mutual funds, NPS, and other instruments.
Remember: tax laws change, and what you read on Google today may not reflect the latest government notification. Always verify with an official source or a qualified professional before making major financial decisions.
Data Sources & References
This article is based on publicly available data from verified government and financial information platforms. All figures are accurate as of February 2026.
📎 Our Sources
- 🏛️ Ministry of Finance, Government of India — Official quarterly PPF interest rate announcements via India Post and National Savings Institute
- 📊 ClearTax — PPF Rules & Tax Guide
- 📊 Paisabazaar — PPF Interest Rate History
- 🏦 ICICI Bank — PPF Calculator & Rate Updates
- 📘 Bajaj Finserv — PPF Budget 2025 Changes
- 📘 Policybazaar — PPF Interest Rate Overview 2025-26
- 🏦 Bajaj Finserv — PPF Rate Tracker
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Tax laws and scheme rules are subject to change. Please consult a SEBI-registered financial advisor or a qualified CA before making investment decisions.